By Xavier Fontdegloria

The U.S. economy continued to expand in March, picking up pace compared with the previous month, according to data from the Federal Reserve Bank of Chicago released Monday.

The Chicago Fed National Activity Index rose to 0.47 in April from a revised 0.36 March, broadly in line with the 0.50 consensus forecast from economists polled by FactSet. April's positive reading signals that economic growth was above its historical trend.

The CFNAI index, designed to gauge overall economic activity and inflationary pressures, is composed of 85 economic indicators from four broad categories of data: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. In April, all four broad categories contributed positively to the index, the Chicago Fed said.

Production indicators were the biggest contributor to the CFNAI in April, by 0.26 points, up from 0.20 points in March. A bigger rise in industrial production--a 1.1% advance in April compared with a 0.9% rise in March--drove the overall increase of the category.

Employment indicators also supported the rise of the index, though by less than in the previous month. The category contributed 0.10 to the index, down from 0.17 the previous month, as job market indicators weakened slightly over the month.

The contribution of the personal consumption and housing category to the CFNAI increased to 0.08 in April from 0.01 in March, while the sales, orders and inventories category to the index contributed by 0.04 from minus 0.01.

The CFNAI diffusion index increased to 0.48 points in April from 0.42 in March, while the index's three-month moving average, the CFNAI-MA3, fell marginally to 0.48 from 0.49. Both the diffusion index and the CFNAI-MA3 suggest that the U.S. economy is expanding, according to the Chicago Fed.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

May 23, 2022 08:44 ET (12:44 GMT)

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